How infrastructure rollout positions Côte d’Ivoire as an ICT leader

Côte d’Ivoire is one of the most developed telecommunications markets in West Africa. Its mobile phone penetration rate was 162% in 2021 and continues to grow as more Ivorians use multiple SIM cards to take advantage of promotional offers. There is strong competition between the existing mobile network operators (MNOs), each of which has invested heavily in expanding and improving their coverage and services.

The fixed-line segment, meanwhile, shows a significant opportunity for growth. Just over 1% of the population has access to the internet through fixed-line services, and a single provider dominates the segment; however, the ongoing rollout of fibre-optic technology is slowly changing this dynamic as consumers and businesses subscribe to high-speed fixed-line services. While infusing the market with greater dynamism, fibre-optic technology also supports the growth of Côte d’Ivoire’s tech start-ups. Together with the imminent launch of 5G, these technologies will underpin the government’s ambitious strategy to establish the country as the leading digital centre in West Africa.

Structure & Oversight

As the telecoms industry continues to expand, the government has prioritised improving the quality of service. The Telecommunications/ICT Regulation Authority of Côte d’Ivoire (Autorité de Régulation des Télécommunications/TIC de Côte d’Ivoire, ARTCI) oversees and regulates the sector. In recent years it has stepped up its efforts to enhance the quality of service, regularly fining operators for non-compliance and even stepping in to revoke the operating licences of smaller firms.

Côte d’Ivoire has three MNOs. France-headquartered Orange, which merged with the previously state-owned monopoly operator Côte d’Ivoire Telecom in 2010, maintains a dominant position in key segments like internet and mobile money services. MTN, a subsidiary of South Africa’s MTN Group, operates fixed-line and mobile telecoms services, while MOOV Telecom, acquired by Maroc Telecom in 2014, competes only in mobile services. Domestic firm VipNet specialises in fixed-line internet services. With around 19.3m customers in the country, Orange leads the market in the mobile, landline, internet and mobile money segments. However, it faces growing competition from the other operators. As of end-2021 Orange accounted for some 43% of mobile phone subscriptions, while MTN and MOOV represented 33% and 24%, respectively.

Performance & Size

The ICT sector represents approximately 10% of GDP and contributes annual tax revenue of around $800m. While the three existing MNOs employ over 2900 workers, the entire sector employs an estimated 200,000 people both directly and indirectly. According to the ARTCI’s most recent quarterly report, in the fourth quarter of 2021 sector revenue totalled CFA304bn ($522.6m), up from CFA268bn ($460.7m) the same period of 2020. The mobile segment brought in CFA254bn ($436.6m), or 84% of sector revenue, in the last three months of 2021. Orange accounted for 50% of revenue in the segment, while MTN and MOOV contributed 30% and 20%, respectively. The increase in revenue is largely attributable to expansion in data and mobile money, which offset a significant drop in revenue in voice and SMS services. For example, Orange’s SMS traffic fell by 51% during this period, while its revenue from mobile internet increased by more than 27%.

Investment

MNOs in Côte d’Ivoire invest significantly in upgrading communications infrastructure to manage the surge in data traffic. In the fourth quarter of 2021 MNOs invested CFA35.9bn ($61.7m) to expand and upgrade their mobile phone networks, down from CFA40.4bn ($69.5m) during the same period of 2020. Working towards increasing its stake in the market, MOOV invested the largest portion, at 39%, with MTN and Orange contributing 36.1% and 24.6%, respectively. Orange continues to invest heavily in expanding its fixed-line infrastructure, mostly on the rollout of fibre-optic technology. Total investment in fixed-line and mobile internet increased more than ten times between the fourth quarters of 2020 and 2021, rising from CFA179m ($308,000) to CFA1.9bn ($3.3m). Orange invested the largest share at almost 94%, followed by VipNet (4%) and MTN (2%).

High-Speed Connections

Côte d’Ivoire launched 4G services in 2016. Orange boasts the widest total coverage, offering 4G services across 23% of the country as of end-2021. Its coverage in terms of the percentage of the population was much higher, at 58%, in large part due to its accessibility in densely populated urban areas. The company’s 3G network was available to 92% of the population located across 82% of the national territory during that period.

In the face of rising demand from mobile subscribers, banks and large companies – and increasing competition – MTN has also invested to improve its network coverage and 4G speeds. In late 2021 the company announced it was conducting a pilot phase of 5G services across nine sites in Abidjan. Côte d’Ivoire’s first 5G network is expected to go live by 2023 – ahead of the country hosting the 2023 Africa Cup of Nations in June and July of that year.

Mobile Segment

The number of mobile phone subscribers reached 44.6m users in the fourth quarter of 2021, up 11% from 40.1m in the same period in 2020. Of these, 99.7% were pre-paid subscribers and 0.3% were post-paid; the split between the two segments has remained largely stable in recent years. The largest portion of operators’ revenue is derived from voice calls (54%), followed by mobile internet (32%), value-added services (7%), mobile money (3%), SMS traffic (2%) and handset sales (1%).

The mobile segment’s average annual revenue per user (ARPU) reached CFA23,000 ($39.54) in 2019, down from CFA27,200 ($46.76) in 2018, according to the most recent figures from the ARTCI. However, ARPU per company varied, with Orange leading the market at CFA30,800 ($52.95), followed by MOOV at CFA20,100 ($34.55) and MTN at CFA17,500 ($30.08).

The number of Ivorian mobile users with access the internet via their mobile phones has increased steadily in recent years, expanding from 43.4% in 2016 to 79.1% in 2021. According to a 2018 study by GSMA Intelligence, a UK-based trade body representing operators worldwide, some Ivorians living in areas with internet coverage faced impediments such as the inability to afford smartphones and low digital literacy rates, and thus did not use mobile internet. To address this, in early 2022 Orange announced that the company would offer smartphone financing to its customers in Côte d’Ivoire. The new service will be provided via a threeway partnership with Yabx, a Dutch firm offering credit products across multiple African countries, and Cofina, an Ivorian financial institution offering financing to small and medium-sized enterprises.

Internet

Even so, most Ivorians access the internet on mobiles. At the close of 2021 there were 21.8m active mobile internet users; in contrast, there were only around 336,300 fixed-line internet customers, with Orange holding a 98% stake in the latter segment.

Despite challenges related to high wholesale prices and limited bandwidth, the fixed-line and broadband segments display significant room for growth. The number of fixed-line internet subscriptions are on the rise, with pricing becoming more competitive and fibre-optic technology – which allows for more secure and efficient data transmission – expanding. Indeed, between 2020 and 2021 fixed-line internet subscriptions increased by over 28%. Although around 70% of internet connections still use ADSL or WiMAX networks, the share of fibre-optic internet users increased significantly, rising from 5% in 2018 to 31% in 2021.

Mainly due to expanded fibre-optic connections, average fixed-line internet download speeds increased by over 68% to 24 Mbps in 2021. The majority of investment in expanding fibre-optic networks is undertaken by Orange, which operates terrestrial fibre links stretching to the borders with Burkina Faso and Mali. Orange Group, also operates the Djoliba cable system, which was launched in November 2021. It connects several countries and the authorities aim to leverage the connection to bolster internet connectivity.

Mobile Money

Despite government attempts to encourage Ivorians to open bank accounts, financial inclusion remains low, with only 19% of the population owning a bank account. Sluggish services, faulty or empty ATMs, delays in the issuance of bank cards and difficulty obtaining loans contribute to this challenge. MNOs have tapped into the large unbanked population by offering mobile money services.

Côte d’Ivoire’s mobile money market is one of the largest in West Africa. Total mobile money users reached 19.8m in the second quarter of 2021, up 7% from 18.5m in 2020 and more than double the 7.9m registered in 2017, according to the ARTCI. Orange held a 46% share of the market in 2021, down from 52% in 2020. Meanwhile, MTN and MOOV continue to grow their share, accounting for 42% and 12% of the total, respectively. There are also a handful of non-MNO mobile money providers with a smaller footprint. More than 687m mobile money transactions were completed in 2020 for a total of $26bn, according to the GSMA. Mobile money revenue from transaction fees for the country’s three MNOs totalled approximately CFA8.1bn ($13.9m) in the final quarter of 2021.

Transformation & E-Government

The digital transformation of the economy is a key priority for the government. In 2020 it announced an initiative to create a national strategy to develop the digital economy with the help of Chinese telecoms giant Huawei. Dubbed Digital Côte d’Ivoire 2030, the strategy prioritises the expansion of high-speed broadband networks to create an inclusive digital economy.

In the interim, government initiatives are guided by interim, government initiatives are guided by the National Digital Development Strategy 2021-25 the National Digital Development Strategy 2021-25 (Stratégie nationale de développement du numérique, (Stratégie nationale de développement du numérique, SNDN). Under this programme the government has SNDN). Under this programme the government has set aside CFA2trn ($3.4bn) for 96 projects over the set aside CFA2trn ($3.4bn) for 96 projects over the five-year per five-year period, with targets such as digitalising all government services by 2023. SNDN also includes digital initiatives in key sectors like health, energy and industry. “The Covid-19 pandemic has accelerated the digitalisation of a number of public sector processes, and looking to the future there is hope that this trend will expand to not only other government operations but also to the private sector as well,” Cyrille Koffi, general director of local IT management firm Société de Gestion et de Concept en Informatique, told OBG.

Indeed, local players expect the emphasis on e-government and digital transformation to have a trickle-down effect on emerging ICT segments. “Open source software has the potential to boost cloud computing in the coming years, supporting companies’ efforts to adopt digital technologies,” Mohamed Sounkere, co-founder and CEO of open source and cloud computing provider VEONE, told OBG.

Start-Ups

Government-led digital economy initiatives and substantial investment in telecoms infrastructure by MNOs are bolstering Côte d’Ivoire’s thriving start-up ecosystem, which is one of the fastest-growing on the continent. In 2021 local start-ups raised $13.7m, a 249% increase from $3.9m in 2020, itself a 240% expansion from the previous year. Most Ivorian startups that successfully secured funding in 2021 were financial technology companies. Others are driving innovation in health care, transport, e-commerce and energy. Moja Ride, a local mobility-as-a-service solution that offers a reservation and cashless payment system secured an undisclosed amount from Toyota Tsusho, the trading arm of Japan’s Toyota Group in March 2020.

Outlook

Côte d’Ivoire has long been a highly profitable market for traditional mobile segment services such as voice and SMS, but rapidly changing consumer habits present new opportunities for growth. As more affordable smartphone options enter the market and 4G and 5G services are rolled out, mobile internet usage and mobile money subscriptions will continue to grow. Expanded fixed-line internet infrastructure is also a key development, with rising numbers of Ivorians signing up for fixed-line fibre-optic internet services.